خلاصة:
Companies incur significant costs from the financial distress. Predicting financial distress will have an important role in preventing bankruptcy. The aim of the present study is to predict the financial distress costs using the Leland and Toft models, during 1996 and 1998. This study examines data relating to 49 companies listed in the Tehran stock exchange collected over ten years from 2005 to 2014. Leland and Toft model (1996) considers the financial distress costs and benefits from the tax shield in general. However, Leland and Toft model (1998) considers the financial distress costs and benefits from the tax shield in detail by using
parameter. According to the research findings, the companies working in automotive industry are bankrupt, but the companies working in food and beverage, pharmaceutical, base metals and cement industries have a good distance from financial default. The results help to improve the decision-making process and to avoid the financial distress.
ملخص الجهاز:
"The results of this study showed that among variables used in neural network, regression and genetic algorithm models, the three variables of current ratio, working capital to total assets, and earnings before interest and taxes (EBIT) against total net assets, based on the available data in the sample are inversely proportional to bankruptcy of the firms.
3-1- Research Questions: • How effective can the mathematical model of Leland and Toft (1996) be in predicting the cost of the financial crisis among the bankrupt active companies in the Tehran Stock Exchange?
During the research period, according to the model, 157 companies were considered bankrupt during the fiscal year, and their current value was practically less than the value of their bankruptcy threshold, and thus lacked the minimum items related to the costs of a financial crisis before bankruptcy.
Table 3: Financial ratios related to the financial crisis in the sample industries (View the image of this page)Source: Research findings Before providing any analysis, it should be noted that due to respect for financial reputation and trustworthiness and in order to avoid breaching trust, no company is mentioned in the study by name, and calculations and analyses are presented only based on the average of each industry(the data and analyses related to each company are available and reserved).
Therefore, the current value of the firm will not be able to cover the debts resulted from received financial facilities, interest cost and endogenous bankruptcy threshold calculated by the model."